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- [Video & Audio] Impact of Tariff & Trade War on Magnificent 7 Companies
[Video & Audio] Impact of Tariff & Trade War on Magnificent 7 Companies
Since Donald Trump launched the trade war against the whole world with his crazy tariff strategy, the S&P500 has crashed -9% (lowest at -12%) with Magnificent 7 being the biggest loser.
DoitDuit | Your Investing Friend
April 22, 2025
Magnificent 7 are crashing down, dragging down the S&P500
Since Donald Trump launched the trade war against the whole world with his crazy tariff strategy, the S&P500 has crashed -7% (lowest at -12%) with Magnificent 7 being the biggest loser. Magnificent 7 companies represents the strongest US tech companies, namely:
Magnificent 7 | Return since 2 Apr 2025 (as at 22 Apr 2025) |
|---|---|
Microsoft | -6% |
Alphabet (Google) | -6% |
Nvidia | -12% |
Apple | -14% |
Amazon | -15% |
Meta (Facebook) | -17% |
Tesla | -20% |
S&P500 | -9% |
The quick crash is not entirely irrational, because some of the Magnificent 7 companies will be directly hit by this insane tariff strategy by the Trump. We can categorise the Magnificent 7 companies into 2 categories:
Hardware Dependent: Nvidia, Apple, Tesla
Not Hardware Dependent: Microsoft, Alphabet, Amazon, Meta
Understanding the above is very important to analyse the impact of tariff, because tariff will only affect physical things that go into the US, which does not include services, for now. This means that Hardware Dependent companies like Nvidia, Apple and Tesla are DIRECTLY impacted by the tariff. They are hit in both end:
Higher cost because most of their supply chain is in / come from China
Lower sales because China is one of their biggest markets, removing China from the equation will significantly shrink their total addressable market
The Not Hardware Dependent companies like Microsoft, Alphabet, Amazon and Meta will also be negatively impacted by the tariff, indirectly.
We will dive deep into the impact each company is taking on, and just to tease a bit, we think that market overthink the negative impact on some of the Magnificent 7 companies, creating a potential opportunity for long term investors.
How will tariff impact Magnificent 7 companies?
Although people always say the stock market is irrational, but that’s not the full picture.
The stock market is rational, most of the time, not all the time.
The share price of a company reflects the wisdom of the crowd, and wisdom of the crowd works most of the time.
This time is similar, because we think the ranking of the stock performance from the smallest drop to the biggest drop in Magnificent 7 companies exactly reflects how much they are impacted by the tariff.
Magnificent 7 | Return since 2 Apr 2025 (as at 22 Apr 2025) |
|---|---|
Microsoft | -6% |
Alphabet (Google) | -6% |
Nvidia | -12% |
Apple | -14% |
Amazon | -15% |
Meta (Facebook) | -17% |
Tesla | -20% |
S&P500 | -9% |
We will go through each company from the least impacted, to the most impacted by tariff.
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